Oil falls below $67
Stronger dollar and weaker equities push crude futures lower, despite attacks on top African exporter Nigeria.
 |
| Click on the chart to see other commodity prices. |
LONDON (Reuters) -- Oil dropped almost 4% to below $67 a barrel on Monday as a stronger dollar and weaker European equities outweighed attacks on the oil industry in top African exporter Nigeria.
Nigeria's main militant group said on Sunday it had attacked three oil installations belonging to Royal Dutch Shell (RDS.A) in the Niger Delta, widening a month-old offensive against Africa's biggest energy industry.
"We've got weakening stock markets and the dollar is starting to strengthen," said Rob Montefusco, a trader at Sucden Financial. "Also technically, it all broke down on Friday."
U.S. crude for July, which expires later on Monday, fell $2.72 to $66.83. It traded as low as $66.70 intraday.
The World Bank warned on Monday prospects for the global economy remained "unusually uncertain" despite recent signs of improvement in parts of the world and cut its 2009 growth forecasts for most economies. Wall Street opened lower, European stocks lost ground and the dollar rose against a basket of other major currencies. A stronger dollar can limit the appeal of oil and commodities to investors.
Chart patterns are also pointing lower for crude. Both Brent and U.S. crude closed below the $70 mark on Friday, a bearish technical development. Even so, crude has more than doubled from a low of $32.40 in December.
Rebels in Nigeria have been carrying out attacks on the oil industry for years in what they claim is a struggle for a fairer share of the region's energy wealth.
Also supporting the market was data showing China's implied oil demand rose 6% in May over a year ago, its fastest growth since August 2008. China is the world's second largest user of oil.
In the Middle East, Iranian opposition leader Mirhossein Mousavi urged supporters to continue protests over the re-election of President Mahmoud Ahmadinejad, in a direct challenge to the Islamic Republic's leadership.
Some analysts say the political turmoil in Iran, a major oil exporter, so far is of limited significance for the markets due to high levels of unused production capacity and inventories. Others see it as supportive.
"The deterioration in the Iranian situation should prevent a sharper sell-off," said Edward Meir, analyst at MF Global.
Crude oil speculators on the New York Mercantile Exchange slashed their net long positions nearly in half in the week to June 16, data showed on Friday. Long positions are bets that prices will rise. 
-
Anne Giapapas has a job in one of the 15 most overworked and underpaid professions. More -
These 5 businesses are offering their services -- from shoes to hair cuts -- to the unemployed. More -
These rising stars, like Facebook's Mark Zuckerberg, have great jobs to fill. Here's what they're looking for. More -
They graduated into the worst economy in decades. Here's how 11 grads are getting by. More -
Executives like News Corp. chairman James Murdoch raked it in. Where the other 19 rank. More -
These 5 cities have the fastest-growing foreclosure rates. And they're not the usual suspects. More
